Meeting with Rosneft Board Chairman Igor Sechin

President of Russia Vladimir Putin: Mr Sechin, aside from the deal we all know
about, how did the year go? What is the overall situation?

Board Chairman of Rosneft Igor SechinSechin IgorRosneft CEO, Chairman of the Management Board and Deputy Chairman of the Board of Directors: Mr President, 2016 saw particular volatility on the hydrocarbon markets. We had to work under pressure, but the year set a record in terms of production for Rosneft. Production increased by around 4
percent with total production for the year in liquid equivalent coming to 265
million tonnes. This is a record figure for the company. Of this amount, oil
production accounted for 210 million tonnes, and we produced 67 billion cubic
metres of gas.

Total
investment in 2016 came to 750 billion rubles. Investment went mainly into
increasing production drilling in Western Siberia and for new projects. This
meant that the Suzunskoye field, the Vostochno-Messoyakhskoye field, which we
developed together with Gazpromneft, and growth at Yuganskneftegaz became the main factors contributing to the production growth we achieved this year.

The volume
of production drilling increased by 35 percent (to 9.3 million metres) in 2016,
and we brought 2,700 new wells into operation. This was also a record figure,
up 43 percent on the 2015 result. This was possible because the company created
its own oil drilling service, and we increased the total number of well rigs by 20 percent in 2016. We discovered
13 new fields over the course of the year, and 103 new deposits with total reserves
of up to 159 million tonnes in oil equivalent. We expect the reserves increment
to reach 290 million tonnes. The Russian refineries affiliated to the company
processed 87.5 million tonnes, and we processed more than 12 million tonnes at refineries abroad, also affiliated to Rosneft. Total processing thus came to around 100 million tonnes.

In 2017, we
intend to bring processing at our facilities up to 120 million tonnes. The share of light petroleum products has grown to 56 percent, and the refinery
yield has increased to 71.2 percent, compared to 2015. Primarily the company
supplies our consumers in the Russian regions where we have a presence, and, of course, we ship to the export market.

Fuel oil production
at Russian refineries decreased by more than 10 percent in 2016, in connection
with new facilities coming into operation, and production of diesel fuel and Euro-5 petrol grew to 28.4 million tonnes, surpassing 2015 figures by 42
percent. As far as production was concerned, the year was tense, but positive
for the company.

Regarding
our tax and budget payments, taking into account the privatisation deal you
mentioned, total budget payments came to more than 3 trillion rubles.

Vladimir Putin: Are you planning to meet with the investors?

Igor Sechin: Yes, Mr President. I wanted to ask you to meet with the investors taking
part in the privatisation deal – our partners from the Italian bank Intesa, the Qatar Investment Fund, and Glencore – to underscore this deal’s significance
and to brief you on the new projects in which they will take part. We plan to increase our active work with these partners. Right from the start, you helped
to prepare this deal, followed it, and we would like to give our partners the chance to talk about the prospects ahead.

Vladimir Putin: Fine.

Igor Sechin: On international projects, the company continues working with its traditional
partners and new ones. These include our Indian partners, ONGC, BP, with whom we are developing work, Exxon, Statoil, and Eni. Work is developing in all areas. We will increase supplies to China to 31 million tonnes this year, and at the same time, we have consolidated our
refining capacity in Europe. We are now the third-biggest producer of petroleum
products in Germany and we ship 18 million tonnes of oil to our own refineries
there. We ship around 71 million tonnes to Europe as a whole, including the 10
million we supply to Belarus. As I said, we will deliver 31 million tonnes to China this year, and will start shipping to India. We will begin with 2 million
tonnes this year and will increase this to 20 million tonnes, which corresponds
to the refining capacity at the Essar refinery in Vadinar, which will now also
become affiliated to Rosneft.

In 2017, we
plan an investment programme of 1.1 trillion rubles. Particular focus will be
on building up capacity at the new fields: developing the Suzunskoye,
Lodochnoye, Russkoye, Kuyumbinskoye, Yurubcheno-Tokhomskoye and Taas-Yuryakh
fields. Then there are our gas assets: Rospan, Kharampur, and the Kynsko-Chaselskoye field.